Oil drops the most in 1 day since April 2020
Oil prices fell $10 a barrel on Nov. 26, the biggest single-day drop since April 2020, as a new variant of the coronavirus spooked investors and added to concerns that sources of oil could not be recovered. Excess supply may increase in the first quarter of 2022.
The US, Canada, UK, Guatemala and European countries are among the countries that restrict travel to South Africa where this new strain of virus was discovered.
Ending the session, Brent oil fell by 9.5 USD/barrel or 11.6% to 72.72 USD/barrel, down more than 8% for the whole week. WTI crude fell $10.24 a barrel, or 13.1%, to $68.15 a barrel, down more than 10.4% this week on heavy trading volume after the Thanksgiving holiday.
Both crudes fell for a fifth week, their biggest drop since April 2020, when WTI turned negative for the first time amid a supply glut caused by the coronavirus.
OPEC+ is also monitoring the development of this variant, with some expressing concern that it could worsen the oil market outlook in less than a week before the policy-setting meeting.
Gold rose slightly
Gold prices edged up slightly after gaining more than 1% caused by a rush to safe-havens on fears of a new coronavirus variant.
Spot gold rose 0.2 percent to $1,791.97 an ounce after rising to a high of $1,815.26. US gold for December delivery closed up 0.1% at $1,785.5 an ounce.
After the safe-haven rally, the overall downside in commodity prices is finally taking its toll on gold.
Supporting gold prices is a sharp drop in the US dollar and lower US Treasury yields.
Gold had its worst week since mid-June, falling 2.9%, pressured by expectations the US Federal Reserve could accelerate interest rate hikes, increasing the cost of holding gold.
Industrial metals fell
Prices of copper and other industrial metals fell on concerns that a new variant of the coronavirus that is resistant to a vaccine would hurt global economic growth and demand.
Three-month copper on the London Metal Exchange (LME) fell 2.6% to $9,465 a tonne. The metal used to gauge global economic health fell for a second straight week.
The copper market was short of 107,000 tonnes in the first eight months of this year compared with a shortfall of 97,000 tonnes in the same period a year ago, according to the International Copper Research Organization. Global reserves are growing but remain at historic lows.
Iron ore and steel fall
Iron ore and steel prices fell in China as the discovery of a new variant of the corona virus in South Africa and new Covid-19 cases in Shanghai raised concerns among investors about the recovery of the global economy. .
However, the Dalian iron ore contract posted its first weekly gain since early October, after five sessions of gains driven by China’s move to ease liquidity difficulties to support indebted property developers. .
Iron ore contract for January 2022 on the Dalian Commodity Exchange closed down 6.7% to 575.5 CNY ($90.06)/ton. However, prices are up 9.5% this week.
In Singapore, the December iron ore contract fell 5% to $96.95 a tonne.
Rebar in Shanghai fell 2.5% after gaining 6 consecutive sessions, while hot rolled coil fell 1.4% to end 4 consecutive days of gains. Stainless steel fell 4.1%.
Sugar prices fall
Raw sugar for March 2022 closed down 2.8% at 19.35 US cents/lb, continuing its pullback from a 4.5-year high at 20.69 US cents/lb last week.
The decline accelerated as official support levels were breached including a trend line at 19.56 US cents.
Falling energy prices could prompt Brazil’s sugar mills to produce more sugar and less ethanol.
March 2022 white sugar futures fell 1.9 percent to $501.4 per tonne after hitting a two-month low at $495.8 per ton.
Mixed coffee
Arabica coffee for March 2022 futures fell 1% to $2,4295/lb. The market rallied to a 10-year high of $2,4820/lb on Nov. 24.
Coffee was less likely to sell-off as the market continued to receive support from declining exchange stocks, as shipments from South America were delayed due to a lack of container shipping capacity and producers unable to deliver. want to sell.
Robusta coffee in January 2022 increased 0.8% to 2,308 USD/ton. The delay in harvesting in Vietnam remains a supportive factor.
Soybean, wheat fell, corn recovered
US soybeans, wheat fell on news of new Covid variants in South Africa.
Soybeans on the Chicago Mercantile Exchange fell 13-3/4 US cents to 12.52-3/4 USD/bushel, the contract’s biggest drop since Nov. 4. For the whole week this week soybeans fell 0.81%.
CBOT wheat for March term futures fell 10 US cents to $8.4-1/4 per bushel, while CBOT corn for the same term closed up 6-1/4 US cents to 5.91-3/4. USD/bushel. This week the price of wheat increased 0.72% and corn increased 3.63%.
Strong export sales softened the shock of the new variant, maize turned positive late in the session.
Corn and wheat export sales beat expectations, with 1.429 million tonnes of corn sold mainly to Mexico and Canada, up 58 percent from the previous week.
Japanese rubber fell
Japanese rubber prices fell at the end of the week, ending four consecutive days of gains and falling from a six-month high hit in the previous session by news of a new variant of the coronavirus.
The rubber contract for May 2022 on the Osaka exchange closed down 10.4 JPY or 4.1% at 246.3 JPY (2.2 USD)/kg. This week prices are still up 7.2%.
The appreciation of the JPY makes properties denominated in this currency more expensive for buyers in other currencies.
The price of rubber in Shanghai for delivery in May 2022 decreased by 455 CNY to 15,240 CNY (US$2,385)/ton.
Prices of some key items in the morning of November 27:
